The UAE plans to invest over AED40 billion ($11 billion) in advanced manufacturing over the next five years. This initiative aims to establish the UAE as a center for advanced manufacturing and to accelerate the diversification of its economy away from oil dependence.

Dr. Sultan Al Jaber, the federal minister of industry and advanced technology, highlighted the progress made so far, stating that the Emirates’ industrial exports reached AED197 billion last year, representing a nearly 70 percent increase compared to 2021. He emphasized that countries with strong industrial foundations tend to experience sustainable economic growth and contribute to societal advancement.

The AED40 billion investment is part of Operation 300bn, a ten-year industrial strategy launched in 2021 with the goal of raising the manufacturing sector’s contribution to the UAE’s GDP to AED300 billion by 2031. Eleven sectors, including chemicals, metals, electrical equipment, food production, pharmaceuticals, rubber and plastics, and wood and paper products, will benefit from this strategy.

To support this initiative, seven local banks, including Emirates Development Bank, First Abu Dhabi Bank, Mashreq, and Emirates NBD, will provide financing packages to industrial companies, particularly those focused on import substitution and high-tech production. The strategy also includes plans to expand long-term procurement opportunities, known as offtake agreements, to exceed AED168 billion over the next decade, which are expected to enhance investor confidence and bolster domestic production capacity.

Additionally, the UAE aims to localize over 4 800 industrial products to manufacture them domestically, thereby reducing reliance on imports. The government has also established a AED1 billion Emirates Growth Fund, backed by Emirates Development Bank, to enhance funding for small and medium-sized industrial enterprises.

According to the Ministry of Industry and Advanced Technology, the manufacturing sector contributed around 9 percent to the UAE’s GDP in 2024, with a target to increase this figure to 15 percent by 2031. Currently, about 700 000 individuals are employed in the manufacturing sector across more than 13 500 industrial companies, with 40 percent located in Abu Dhabi and 20 percent in Dubai.

Between 2021 and 2024, the UAE attracted over AED180 billion in industrial investments, driven by regulatory reforms and infrastructure spending. Emirates Development Bank alone financed over AED8 billion in industrial projects during this period. The urgency for diversification stems from the UAE’s reliance on hydrocarbons, which still account for approximately 30 percent of GDP and over half of government revenues. As oil prices remain volatile, the government is increasingly focusing on advanced manufacturing, technology, and green energy as essential components of its post-oil economic model.